Certification Updates

WASHINGTON, DC, September 24, 2009—Preparing for retirement and managing income while in retirement are among the top issues confronting American consumers, according to the 2009 National Consumer Survey on Personal Finance released today by Certified Financial Planner Board of Standards, Inc. (CFP Board). Despite these concerns, however, nearly two thirds of those households do not have a written financial plan.

CFP Board’s survey of 1,742 consumers shows that 51 percent of the respondents listed building a retirement fund as one of their most important financial concerns. Managing retirement income was cited in 40 percent of the responses. Other top pressing issues for consumers were generating current income (59 percent), providing health insurance coverage (55 percent) and managing or reducing current debt (53 percent).

Despite the personal finance concerns cited by the survey respondents, nearly two-thirds (64 percent), did not have a written financial plan in place. Only 17 percent indicated that they have a written plan in place and update the plan regularly.

Those consumers who do have a written financial plan in place feel strongly about the benefits of having a plan. Among those consumers who have developed a plan without the assistance of a financial professional, 48 percent said they benefitted from the written plan. The recognized benefits of having a plan increases significantly for consumers who used the services of a financial adviser to develop a plan, with 65 percent of those individuals saying a written plan is beneficial.

“Clearly, those consumers who have a financial plan in place have a higher degree of confidence that their finances are in order,” said Kevin R. Keller, CEO of CFP Board. “These people believe that the intervention of a financial planner positively influences their ability to achieve their financial goals.”

The goals that motivated consumers to seek professional assistance varied by the respondents’ education level. For example, among households that have a written financial plan in place, 17 percent of individuals whose formal education ended before or during high school cited the need for retirement planning. Of those who attended, but did not complete, college, 22 percent cited retirement planning. Of those who completed college, 61 percent cited retirement goals.

The goals that motivated consumers to seek professional assistance also varied by the respondents’ income level. Savings was the most frequently cited financial planning need among those making $50,000 or less a year (24 percent). In contrast, among those earning $50,000 to $100,000 a year, retirement planning was cited by 48 percent of the respondents, and savings goals was cited by 47 percent.

“These results tell us that Americans of every type of background and income level think carefully about their assets and how to improve their financial state,” said Eleanor Blayney, CFP®, consumer advocate for CFP Board. “We also see that many lack an understanding that everyone can benefit from having a financial plan, regardless of one’s wealth or social status.”

Respondents who did not have a written financial plan cited a number of reasons for not preparing one, including: their finances were not that complicated, expense of engaging a financial professional, do their own financial planning on an informal basis, they get along fine without a financial plan, and confusion over the qualifications of financial intermediaries. Forty percent indicated they were not aware of any credential for financial professionals.

Those people who used a financial professional when developing their written financial plan put a premium on ethics and practice standards (89 percent and 87 percent, respectively), as well as enforcement of those standards (80 percent). All survey respondents had high recognition of those financial intermediaries who hold credentials representing high ethical and practice standards that are actively enforced. Respondents had the greatest awareness of those identified as Certified Public Accountants. CFP® certification had the next greatest level of awareness, at 28 percent.

The results of the survey can be found at: www.CFP.net/downloads/CFP_Board_2009_National_Consumer_Survey.pdf.

About CFP Board: The mission of Certified Financial Planner Board of Standards, Inc. is to benefit the public by granting the CFP® certification and upholding it as the recognized standard of excellence for personal financial planning. The Board of Directors, in furthering CFP Board’s mission, acts on behalf of the public, CFP® certificants and other stakeholders. CFP Board owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™ and federally registered CFP (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements. CFP Board currently authorizes more than 60,000 individuals to use these marks in the United States. For more about CFP Board, visit www.CFP.net.